Here The Wall Street Journal editors describe possibilities for punishing Russia for its invasion of Ukraine without firing a shot.
Any counterpunch by the West needs to hit close to Mr. Putin with financial sanctions. Mr. Obama could expand the number of Russians covered by the 2012 Magnitsky Act, which bans human-rights abusers from traveling to or banking in the U.S. His refusal to expand the Magnitsky list as promised in December was the latest signal of this Administration’s lack of concern for bad Russian behavior.
As with Iran, the U.S. can deny Russian banks access to Western capital markets. The G-7 can impose quotas on imports of Russian metals, grain and possibly energy. These sanctions would push the Russian economy, set to grow 1% this year, into recession and “sharply” weaken the already weak ruble, according to Moscow-based Renaissance Capital.
Rich Russians keep most of their money in Europe’s banks, live in its capitals and send their kids to its schools. Punish Mr. Putin’s circle with asset freezes and travel restrictions and you endanger his regime. Four-fifths of Russia’s inward direct investment comes from the EU; half its exports go there. Vice President Joe Biden did something possibly useful this week by calling the president of Cyprus. This favorite Mediterranean destination for Russian capital is an important ally in opening up the financial front against Mr. Putin.
Europeans could also stop turning a blind eye to money laundering from the east. Earlier this week Austria arrested a Ukrainian energy oligarch closely connected to Moscow who is wanted in the U.S. A similar attitude adjustment toward rich, Kremlin-connected Russians is overdue across Europe, especially in the city often known as Londongrad.
Russia can also be squeezed through the international courts for absorbing Crimea. The Ukrainian government needs a legal strategy to file claims for billions of dollars in state and private property lost to Russia’s occupation. Aeroflot planes, overseas accounts and government real estate may be war reparations for Kiev one day.